Differences in Cultures

Differences in Cultures

Doing Business in Saudi Arabia -

A situational Review

What is CultureCulture is a system of values and norms that are shared among a group of people

and that when taken together constitute a design for living.

What is Culture Values

Values may include a society’s attitude towards such concepts as

Individual freedom - Democracy Truth - Justice Honesty - Loyalty Social obligations - Collective

responsibility Role of Women - Marriages etc

Value for the foundation of culture

What is Culture Norms

Norms are social rules that govern people’s actions towards one another.

Types of Norms Folkways

Attitude Towards Time Rituals and symbolic behavior

Customs, Traditions Central to the functioning of society and includes:

Indictment against theft Adultery Certain Customs have been made law

Culture, Society and Nation Cultures may embrace many nations

Islamic Culture A nation may contain several Cultures

Canada - Anglo-culture, French speaking cultures and Native American culture

The Determinants of Culture

CultureNorms &Value System

SocialStructure

Religion

Language

Education

EconomicPhilosophy

PoliticalPhilosophy

The Determinants of Culture Social Structure

Social structure refers to its basis social organization

Two relatively more important dimensions of social structure:

Degree of Individual vs. group as basic unit of social organization

Degree of social stratification

The Determinants of Culture Social Structure – Individuals

Individualism is more than an abstract political philosophy

Emphasis on individual performance Difficult to build teams High mobililty of managers Create dynamism Adverse impact on managerial stability and

cooperation USA Vs. Japan

The Determinants of Culture Social Structure – Groups

Social status of an individual is determined as much by the standing of the group to which he or she belongs as by his or her individual performance.

Group has frequently come to be associated with the work team or business organization to which an individual belongs

In traditional Japanese society, group was the family or village to which individual belonged.

Results into wide-spread self-managing teams. Cooperation is driven by the need to improve the

performance of the group. Lifetime employment is a norm in such environments.

The Determinants of Culture Social Stratification

Societies are stratified on a heirarchical basis into social categories i.e. into social strata

Social Strata are defined on the basis of characteristics such as

Family background Occupation Income Better life chances Standard of living Work opportunities

The Determinants of Culture Social Stratification

Caste System like cobblers, butchers etc. Class System – less rigid than caste system

Upper class Middle Class Lower Class

Social Stratification – Two dimensions Degree of Mobility – USA and Japan

Britain and India

Significance for business – Labor and Management relations

The Determinants of Culture Religious & Ethical Systems Types of Major Religions/Philosophies

Christianity 1.5 billion Islam 1 billion Hinduism 750 million Buddhism 300 million Confucianism200 million

The Determinants of Culture Major Religions/Philosophies – Economic

Implications Christianity – Catholic Protestants

Importance of hard work Wealth creation (for glory of God) Abstinence from worldly pleasures The Spirit of capitalism as argued by Max Weber , a

German socialogist.

The Determinants of Culture Major Religions/Philosophies – Economic

Implications Islam

Explicit economic principles which are pro-free enterprise

Protection to right of property is embedded Holders of property are trustees rather owners Entitle to earn profits but to use for righteous and

socially beneficial manners No deception, No breach of contract

The Determinants of Culture Major Religions/Philosophies – Economic

Implications Hinduism

Individuals should not be judged by their material achievements but by their spiritual achievements.

Hinduism do not encourage the kind of entrepreneurship as protestantism.

Caste and class system

The Determinants of Culture Major Religions/Philosophies – Economic

Implications Buddhism

Founded in India in sixth century BC by Siddhartha Gautama, an Indian prince

According to Buddhism, suffering originates in peoples’ desires for pleasure.

No historical cultural stress on entrepreneurial behavior.

Absence of caste and class system however offer better business environment.

The Determinants of Culture

Major Religions/Philosophies – Economic Implications Confucianism- An ethical system

Founded in fifth century BC by K’ung-Fu-tzu, generally known as Confucius

Three values are central; Loyalty Reciprocal obligations Honesty China, Japan, Taiwan and Korea

The Determinants of Culture Language – Spoken and Unspoken

Language Spoken Language

Language does more than communication The nature of language structures the way we

perceive the world Define the culture English is the largest speaking language, followed by

French, Spanish & Chinese Local Language is an advantage Chevrolet Nova in Puerto Rican

The Determinants of Culture

Unspoken Language

Nonverbal communication like

Gestures Cues Personal Space

A failure to understand non-verbal cues can cause failure in international business

The Determinants of Culture Education

Formal education plays a key role in society Cultural norms like respect for others, obedience, being

on time, honesty are all part of hidden curriculum of schools.

Grading system teaches children the value of personal achievement and competition.

Education is determinant of national competitive advantage- WIPRO

Skilled and educated workers seems to be major determinant of economic advantage-Egypt

Location of business is also influenced by education The general education level is also a good index of the

kind of four Ps to be used for a society.

Culture & Workplace A society’s culture affect the values found at

workplace. Management process and practice need to vary

according to culturally determined work values. Geert Hofsted Study – A psychologist at

IBM Power Distance Individualism vs. Collectivism Uncertainty avoidance Masculinity vs. femininity

Culture & Workplace Power distance

How does a society deals with the fact that people are unequal in physical and intellectual capabilities

Inequalities in wealth and power led to high power distance

Individualism vs. collectivism In individualistic societies, the ties between individuals

were loose and individual freedom and accomplishment are valued.

In collective societies, individuals were born into collectives such as extended families and they take care of each other for collective interests.

Culture & Workplace Uncertainty avoidance

Measures the societies in terms of accepting ambiguous situations and tolerating uncertainty.

Masculinity vs. femininity The relationship between gender and work roles. In masculine societies sex roles are sharply

differentiated In feminine societies, sex roles are less differentiated.

Culture & Competitive business The value system and norms affect the cost of doing

business in a country The cost of doing business establishes firm’s ability to

compete in the global business Japan could be one example of competitive advantage Japan’s cultural values like loyalty, reciprocal obligation,

honesty and education all boost the competitiveness of Japanese companies.

This tend to foster an ethic of hard work and cooperation between labor and management for the good of the company

The connection of culture and competitive advantage has important implications for marketing and outsourcing.